November 2005 Voice of the Broadcasting Industry Volume 22, Issue 11

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RADIORADIO NEWS ® NEWS and TV subsidiary. Lincoln hadn’t been in broadcasting, but Chairman How should HD Radio and CEO Jon Boscia likes what he sees and says the company will keep the broadcast unit—with a name change expected. be numbered? Jefferson-Pilot Communications currently provides about 10% of the Lots of people in radio are excited about opportunities for multicasting operating profits at Jefferson-Pilot Corporation. That will translate to with HD Radio and a handful of stations are already offering a second about 4% of the operating profits at the merged company. HD program channel in addition to the HD channel duplicating their RBR observation: The value of the Jeff-Pilot Communications sub- analog programming. Of course, there aren’t very many HD receivers sidiary wasn’t broken out from the main deal. However, Jeff-Pilot sup- out in the marketplace yet—and even fewer second-generation receiv- plies considerable financial data about the broadcast operation, although ers capable of tuning to the second channel. For now, those second it doesn’t separate radio and TV, so we can come up with a ballpark channels are being called HD-2, but there’s a debate going on inside the figure. The broadcast division had $239 million in revenues in 2004, radio industry about how HD should be numbered going forward. about 6% of the company’s total of 4.1 billion. Jeff-Pilot Communica- Cox Radio kicked off the debate by asking other radio groups for tions reported broadcast cash flow of $108 million for 2004. If we apply input on focus group research it plans to fund to ask consumers for a blended 12 times multiple, the value of the broadcast stations in this their opinion on various channel numbering schemes. Cox manage- deal is roughly 1.3 billion. After looking at BIA figures, out best guess is ment prefers an approach which would continue the current FM band that radio accounts for about 63% of revenues and cash flow, so we’re numbering system, so the first additional channel for a station on 88.1 calling this deal $820 million for radio and $480 million for TV. would be designated 108.1. With eight HD channels per licensee (once analog signals are phased out), the Cox numbering system would run from 88.1 through 247.9. Zinio users can see the entire chart. When will the We at RBR would prefer to see radio get away from “point-any- thing” and move to a new channel numbering system that’s more indecency shoe drop? consumer friendly. Our proposal would number AM HD stations from Despite the fact that the FCC email boxes have been relatively channel 530 through 1709 and FM HD from 2000 through 3009. quiet all year when it comes to indecency complaints, we’ve been Zinio users can also see that entire chart here. hearing all summer that the Commission was close to clearing out RBR observation: We’re not sure our proposal is perfect, but we a large backlog of indecency cases already being processed. FCC do think it’s a step in the right direction. HD is a great opportunity for officials at the September NAB Radio Show in Philadelphia con- radio to rebrand itself, so it’s important to get it right. We’re all going firmed this and said cases were almost ready to be made public. to live with this for many decades to come. The best suggestion we’ve As we write this, nearly a month has gone by and still: nothing. heard so far is that the radio industry needs to band together and hire One thing is certain, however. This is one issue where it doesn’t branding experts to research the HD Radio numbering question. More matter that this is a Commission frequently polarized on party creative thinking is needed, along with some professional research, to lines and hamstrung by an empty seat which promises a two-two make sure radio gets this right. tie vote on many contentious issues. When it comes to indecency, each party has a hawk: Chairman Kevin Martin from the Repub- Jefferson-Pilot sold licans and Michael Copps from the Democrats. And it’s not like Republican Kathleen Abernathy and Democrat Jonathan to Lincoln Financial Adelstein are pro-indecency either. While everyone in radio and TV was focused on the auctions of the One option looking ahead is to further refine content control Emmis TV group and Susquehanna Radio, an unexpected deal flew in devices and better educate parents on how to effectively use them, under everyone’s radar—not that media companies had any opportu- but that only works for video services. Radio broadcasters have nity to bid anyway. In a move to become a much bigger player in the long complained that they have had to bear the brunt of FCC insurance business, Lincoln Financial announced a deal to acquire indecency enforcement while TV largely gets off the hook. If TV Jefferson-Pilot Corporation for $7.5 billion in cash and stock. That, of gets time to pursue its tech options, look for the emphasis on course, includes Jefferson-Pilot Communications, the company’s radio punitive enforcement to continue with its heavy radio tilt.

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TELEVISION NEWSTV NEWS life. Lot’s of possibilities and I’ll take time to consider all options,” Apple unveils Video iPod he told RBR/TVBR. No immediate replacement was named and The radio industry is already seeing the impact of Apple’s iPod Tribune Company CEO Dennis FitzSimons told analysts that devices. The hugely popular and extremely portable devices for Tribune Broadcasting Vice Presidents John Reardon and John playing music is making it harder than ever for radio stations to Vitanovec are now reporting directly to him. attract listeners in the younger demos. Now it’s TV’s turn. At Fisher Communications, Colleen Brown has been Just in time for the Christmas shopping season, Apple has un- named President and CEO, nine months after the ouster of veiled an iPod capable of playing videos, evolving the ubiquitous William Krippaehne. She once headed the TV group at music player into a multimedia platform for everything from TV Lee Enterprises and most recently was Sr. VP at Belo, over- shows to music videos. Videos will now be sold alongside songs seeing its TV and cable operations in Texas. Before the job on Apple’s iTunes Music Store—including ABC-TV and Disney at Lee, she managed Gannett’s TV station in Phoenix. With Channel shows. That has some ABC affiliates worrying about her arrival, acting President and CEO Ben Tucker exited to whether the move will devalue their local franchises, but Disney “pursue other interests.” CEO Bob Iger is gung-ho on keeping up with new technologies. TVBR observation: Who was it who first said “There are 200 In announcing the new video iPod, Apple CEO Steve Jobs said management jobs in broadcasting and 250 people playing musi- the companies will start with five shows, including ABC’s “Des- cal chairs”? We hear that both Tucker and Mullen are working on perate Housewives” and “Lost,” as well as the new ABC drama business plans to return to broadcasting in an ownership role. “Night Stalker” and the two most popular shows on Disney Chan- nel, “That’s So Raven” and “The Suite Life of Zack & Cody.” Cur- rent season episodes of the ABC series will be available for down- DTV-Day on the calendar load from Apple’s iTunes Music Store the day after they are broad- By the time you read this, it is as close to a sure thing as there is cast, while the entire first season of “Desperate Housewives” and “Lost” will be available for download immediately. in Washington that there will be a hard date for broadcast televi- TVBR observation: The key is to go where the consumers are. sion stations to bring to a close the current side-by-side analog/ Radio companies are still trying to figure out audio iPod plays, digital operating regimen and go digital only. It is widely be- with some offering downloads of popular Talk shows and others lieved that 4/7/09 will be the big day. providing music downloads to make young listeners get accus- The especially active hurricane season served to up the vol- tomed to visiting their websites—and hopefully listen to the radio ume of calls to move the date forward, notably from John station as well. But consumers also want portable video. TV com- McCain (R-AZ), but these calls have met resistance from McCain’s panies are now doing deals with telecom companies to supply successor at the helm of the Senate Commerce Committee, Ted short video pieces for video cell phones. Video iPods is yet an- Stevens (R-AK). other logical step. Disney is the first to jump into the pool—but it The fuel propelling the earlier-date movement is the provision won’t be the last. of spectrum to emergency first-responders. A big goal on that front is to gain interoperability between numerous communica- tions systems in use that currently cannot communicate with one Musical chairs in another. Stevens has pointed out that you could give first re- sponders the spectrum today, but they wouldn’t be able to do the broadcasting biz anything with it, since they do not have the necessary equipment If you’re updating your Rolodex (or, more likely, some electronic to take advantage of it. device), there have been some major changes recently in a couple There are other reasons to go with the later date, including the of broadcasting companies. idea that the rest of the spectrum will fetch a greater price from After several tough quarters at Tribune Broadcasting, Pat Mullen hungry telecom companies at auction. Also, Stevens reasons that submitted his resignation. “It’s time for a change for me and I’m giving consumers more time to upgrade their own home receivers sincerely happy and looking forward to the next chapter in my will mean less government outlay for down-converter subsidies.

RBRi&iTVBRZNovemberi2005 5 GM TALKBACK GM TALKBACKBy Carl Marcucci / [email protected] and Rita. It is critical for broadcast operations in this area to be very well What plans do you have prepared with a Hurricane “action plan”. That plan is put into effect as soon as the storm appears to have any probability of striking your area. As those of us that have experienced storms have come to appreciate, in effect for potential being on the “dirty” side of the storm, i.e. east of where the eye makes land fall, also increases considerably the risk your community faces. natural disasters? For example, our city, Baton Rouge, LA, experienced minimal dam- age from Hurricane Katrina as we were west of where Katrina came Mark Bass, GM, Clear Channel, ashore in eastern Louisiana, Mississippi and Alabama, all of which West Palm Beach, FL were hit extremely hard. Our plan changes depending on how inten- In the era of consolidation, the optimum way to address Hurricanes sive the storm is that may hit our area. We is to have a written plan to pool or consolidate the resources of the learned a lot last year when the eye of two entire cluster or if the ownership has more than one cluster in the Hurricanes came over our market. affected area, multiple clusters. And once the storm is within 24-48 1. We are in a constant state of readiness hours of coming ashore to then move to an “All Hurricane…all the in regards to; Water and food at the station, time” informational format on all stations in the cluster irrespective of Generators properly serviced and fueled and the stations regular format(s). backup plans to find more fuel. We work with the other Clear Chan- Broadcast stations have the opportunity, as was demonstrated repeat- nel markets in the South FL Region on our plan; Non-essential person- edly during the two most recent storms, to step up and provide a huge nel out of the building 24 hours before the worse would hit. community service to their cities. Disseminating essential information 2. Engineer and myself have a plant o stay at the station if its not a before, during and after the storm becomes reaches huge importance in large storm (we stayed here during a cat 3 last year). Or go to a shelter helping people survive, whether evacuated or “riding out the storm.” nearby at the last minute, while providing coverage up until then. We Paul Robinson, CEO Emerald City would offer live coverage until it got too bad then switch to a feed from Radio Partners, Baltimore, MD another CC market such as Miami (WIOD did coverage for us when we In this case I would have to suggest that had to abandoned the building last year). We set the bird up and left. beyond the presence of standard redundant 3. We would probably simulcast coverage before and after a serious systems for restoring service to the com- storm just in case we lost one or more signals. We always plan to split munity as quickly as possible most radio the commercial content irregardless. station operators are woefully ill-prepared 4. Personnel would be put on notice long before the storm to come for natural disasters. in and work on coverage and logs. We also have someone from the I dare say that the unprecedented size and sales dept. standing by. You would be surprised how busy you are scope of the damage caused by hurricanes during the thick of things. We had two record months last year due to Katrina and Rita should act as a catalyst, for the revenue being pumped into the markets before and after the storms. all of us, the radio industry included, to reassess across-the board our 5. The information flow is dramatic after a serious storm, we have level of preparedness in emergency situations. The radio stations in one person coordinating the coverage and keeping up with the perti- the Gulf Coast that struggled to get back on the air served as a battery- nent information. powered lifeline for critical information when the lights went out and 6. We plan on having someone located in the Emergency Manage- the floodwaters came. ment Shelters just before the storm to report directly back to us. Despite the industry’s best efforts however, we learned that Radio 7. Personnel would be on notice before the storm as to what role they cannot and should not “voice-track” its way through an emergency of would play. We had our number one talk show host standing by to be one this magnitude. This is simply not in the public interest even in this of the first voices on the air after the hurricane. He and I spent 12 hours on age of consolidation and “economies of scale”. the air the first day together giving out important info to the community. Unquestionably the cost to station owners and operators of equip- 8. We plan to “let the people talk”...many were without power for 4- ping and maintaining a staff at the ready to launch at a moment’s 5 weeks, we were their best friend in the middle of the night and the notice into “emergency disaster” information and coverage mode is one that gave them access to vent about anything or just share a story. substantial. But 9-11 and the Katrina and Rita experiences demon- Also develop a relationship with all the local authorities now, we be- strate that the need to do so absolutely essential. came close to all of them and our facility was used as a base by many. In my view, government could provide an effective investment We still get praises for our coverage last year, it was gave us tremen- incentive through the creation of special local state and federal dous credibility with the community. tax incentives (Tax Incentive Funding or TIF) programs that award radio operators who make this substantial commitment required Owen Weber, Guaranty Broadcasting, to effectively serve the public interest in emergency situations. Baton Rouge, Houma and Picayune (New Orleans), LA: Clearly, it will take a whole lot more than a free diesel powered As we have seen in the last two years especially, the entire Gulf Coast of generator from FEMA to get us better prepared for the inevitable the United States can experience repeated major storms such as Katrina crises to come. 6 RBRi&iTVBRZNovemberi2005

NEW ORLEANS NEW ORLEANSBy Carl Marcucci / [email protected] Vigilance in a time of crisis As New Orleans continues its clean-up and plots a rebuilding from Hurricane Katrina, the city’s radio and television stations continue helping locals by providing information, assistance and a place to air their con- cerns and criticisms. Two stations that were there full-time during and after Katrina were Entercom’s WWL- AM and Belo’s WWL-TV. We asked Bud Brown, GM, WWL-TV and Phil Hoover, Entercom’s Market Man- ager, about the invaluable service they and their staff performed for their community. In a time of satellite radio, Internet and iPods, if these “testaments to the trade” don’t prove the value of live and local broadcast- ing, nothing will. Here they tell their stories.

live in for a while but they could and did. We shut down the Bud Brown, digital signal to save power for the most part while we were GM, WWL-TV: running on generator. And they did have water in there and it had facilities and so we were able to retreat to one section one Tell us a little bit about some of time when the civil unrest became so great. That was of concern and also initially the first time we evacuated the transmitter was the heroes at WWL Television. when the levy broke and we knew the water was coming down We had people who, even though their Canal Street. Being in the Quarter we were afraid we would be homes had been destroyed and they flooded as well. had taken their family and sent them We made a really good relationship with the Louisiana State’s off, continued to come to work and keep the public informed. Broadcasting Department and were able to use their facilities as They felt that was a trust they weren’t going to betray and they well days until we eventually got to Louisiana Public Television, were needed here—they were the heroes. The thing that con- which has been instrumental in our being able to stay on the air. tinues to amaze me I think about 80% of the people at the sta- tion who were functioning in the news and engineering areas, How did your station help viewers and their homes had been either totally destroyed or damaged in some way that made it very difficult for them to live in them. how did that help change over time? Again, they continued to come to work. One of the things that we found is that there was a lot of loss of Our News Director Sandy Breland I would single her out as communications from what I consider to be kind of light commu- probably the player of the game. She demonstrated very clear nications—cell phones, Nextel—some things that disturbances of leadership in addition to having her house destroyed. She did high winds, water etc. can take out. And so people, when they just an admirable job. I would say that the whole group just did lost communications, were able to observe was the only broad- an incredible job. There were people that worked innumerable cast television on the air—us. So we provided a means of telling hours, there were people who went in harms’ way to get stories, people where the storm initially was, what the damage was, the to help people. It was just an incredible effort. levy was certainly part of what we were communicating out—get to higher ground. Initially it was just about warning people about We hear you’re the only TV station in the city the many threats that were coming as a direct result of the storm and the flooding that ensued. Afterwards it was telling people that continued broadcasting throughout. where the need was and what the expectation, or in many cases How was it possible? lack of expectation there was, in terms of federal relief. Where I’ll put it down to two things. One, an excellently well-executed you could go and what you should expect if you had evacuated. plan, which we knew really well, and the other was a very ro- Everything from the energy number that you need to call and bust transmitter that was built about five or six years ago. It has telling, we go live when the, we open up a county or a parish to our 1,000-foot tower on it and it’s 14 feet in the air riding on say you can come back into this parish for today starting on Thurs- girders and concrete, and it is a fortress. It was built that way at day to look at your property, you may not stay, then you can leave considerable expense, and at the time people wondered whether and then this is how this operates. We tell people what bridges are if this would be justified but the reality was that it certainly was. washed out, what roads are no longer in service. We tell people The Harris transmitter was excellent, plus the fact that we had a how to get in, we tell people you’ve go three inches or four inches huge generator. of water on the first floor, you have to rip out your floorboards and As a base, we were able to move from our facilities in the they have to dry out. You may need tetanus shots. French Quarter to the transmitter which provided uplink, down- One of the really interesting things that happened for us was link, an air conditioned environment—not built for 40 people to our signal migrated with the evacuees. At one time we carried it 8 RBRi&iTVBRZNovemberi2005 on the digital spectrum of our stations in Dallas and Houston and eventually on 30 other stations across the country. We had people in Boston watching us. There were TVs within the places where people had evacuated to like the Houston Astrodome and they were able to watch their hometown station there and all across the country. We offered it up as part of an NAB program to tele- vision stations and 30 of them took us up on it. The other thing that became incredible was the distribution of our signal was also done by our fairly robust Internet site. We can get 300,000 hits on a typical day. We hit one Tuesday almost 16 million hits. When did you bring back regular CBS programming? WWL newscasters and directing efforts behind the scenes at the studio Well it happened in a wave like the hurricanes came. We were up linking from Baton Rouge with our continuous coverage to our transmitter and the transmitter was able to go to CBS and we couldn’t run commercials or anything. Thursday, September 8th was the first time we went back to anything normal. Everybody was emotionally and physically exhausted and the best thing we could offer was something that was funny and light, and David Letterman was the exact right thing to do. Following that we periodically would put in more and more programming. Any local interviews that were really memorable? We were out at St. Bernard Parish and there was a woman who said how she had been there with her 90-year old mother. She had a generator and she had water up around her. They had no one around and were there for nine days. The only thing she had at night was when she would turn on the TV to watch us. And she said to see a familiar face was just more than she would ever be able to express to us about how important that was to her. Every- one was pretty exhausted, it was in the middle of the coverage, and we said nobody’s going to believe this tape. We put it in and played it for the entire room. Sandy Breland said, “If you ever wondered why it is we do what we do that’s it right there.” We gave her information, we told her about what was going on. She knew where the storm was, she knew what the level of damage was and she also knew that help would eventually be coming. But she said the important thing was she saw a familiar face at the middle of the night. That was one of a number we had where people just said, “You’re the only ones that were there, the only ones that we could listen to.” We got that from city officials as well. This is really what broadcasting is all about. There are issues about cable and about satellite, but what it comes down to is to serve the public interest is part of what we do. I was never so proud of any group that I was, with this. I talked to The transmitter fortress: outside and inside George here and asked how he was doing and he said, “Well some of my family, my wife and my kids are in Indiana so they’re fine with my mom and dad.” Then I said, “How’s your house?” He said, “Well, that got destroyed. Water…had four feet in it. We’re going to have to tear it down. It will never be rebuilt there. We don’t know what we’re going to do.” And then he’d say, “But I’m here to do coverage.” We slept on the floor and we had housing issues here in Baton Rouge—people were sleeping six to a room. I will tell you quite honestly—and no lying—not one complaint at all. None. None. And then Belo—everybody at WWL immediately got $1,000 in their checking account right off the top. They said, “Okay, this is kind of to tide everyone over and don’t anyone worry about your jobs, just keep going on. Then they said, “What do you need?” I 10 RBRi&iTVBRZNovemberi2005 FEATURE said I need more reporters and satellite trucks and I need techni- Phil Hoover, cians and operators. So the staff swelled to about 190 and these were Belo people from the Dallas Morning News, The Providence WWL/Entercom Journal and our 20 TV stations. They brought in logistics people to handle housing and rental Market Manager: cars and medical. I said we need some shots. They came back in like an hour said “We’re bringing over people from a local hospital. Tell us about some of the We’re just going to go with tetanus right now cause that’s what the CDC is recommending. Then they would bring in food or ice or heroes at your stations. machines or whatever. Gasoline was a huge issue. The people at I would be totally remiss if I didn’t Public Television and Belo brought in logistics people who brought say that any one of the staff members in gasoline in tanks and diesels. They provided us with security that actually stayed through the storm, officers to accompany people into the city when we thought that that they all are considered heroes in my mind. There are cer- was threatening. They guarded our transmitter. They brought in tainly those who have distinguished themselves with their hero- helicopters from our stations in Houston and Dallas. It was huge. ics and I think we have to put them into two different catego- ries—not necessarily of heroes but the types of actions that they Any advice you can give other GMs? took to certainly make themselves heroes. When I think of our engineering staff, which was separated—one was at the Jefferson I don’t think people believe in disaster plans, we have to write Emergency Operations Center which was a studio into and of them because of corporate and we don’t believe them. But here itself allowing us to keep WWL on the air through their emer- at WWL we believe it because we know it’s a possibility. Here’s gency generation. There was an engineer over there by the name the most important someone might actually use—your cell phones of Dominic Mitchum where in the height of the storm during will not work. Your Nextel’s will come up late. Your Blackberrys the hurricane, WWL’s power went off. The auxiliary generator will work a little bit. You’ve got to plan on the idea that you will wouldn’t kick in so Dominic drove through the storm to the trans- not have communications. The plan has to be so well communi- mitter site and literally waded through alligator and snake in- cated to everybody on your staff that they know what people fested waters to get to the transmitter site to put the auxiliary they cannot communicate with are doing. So if I can’t communi- generator back online. The other two engineers were with me at cate with Dallas I know what Dallas is doing. You’ve got to plan the main studios and as glass was breaking and windows were on not being able to communicate very effectively for the first 12 exploding and studios needed to be shifted, they put themselves hours. If you cannot work out of your studio or normal base, at peril in order to get into those offices, secure those studios and where will you go? You may need two places. to maintain connection for our six radio stations. The other heroes, every single one of the news programmers What’s the plan when sales comes back? and our talk show hosts, they were able to provide to the com- We’re open already. We’ve brought both local and national munity in terms of a link to freedom and safety. Dave Cohen sales back. In fact we had them working before the second [WWL News Director] certainly has done his share in saving lives. hurricane hit. When our salespeople were out then we figured When the waters were starting to flood into the city Dave was the St. Louis, where we have a television station, would be the only lifeline to people in their homes. They were calling him and central gathering point for people who wanted to send us com- asking him what to do, how to do it? There was a woman we mercials because we had no idea how the mail system would remember who was up to her waist in water and holding two operate or shipping. KMOV St. Louis either uplinked them to children and she didn’t know what to do. She had gone up to the us or sent them by a compressed video format on a clip ser- second floor of her home. Dave never thought in his wildest vice. Our DOS went to St. Louis. Our NSM went to Houston. dreams that he would ever be in a position as a news director to She evacuated twice. They had office space there. We had a be trying to guide her through a safe evacuation of her home. He manager who went to WHAS Louisville and operated out of called and talked to one of our talk show hosts and wanted to there where they gave her a phone, computer and workspace. know what to do as the waters were rising. We certainly don’t Again, you’ve got to plan on what are you going to do if you know what happened to some of these people, but to have a can’t go to your station. radio station there and being able to be a lifeline certainly put our folks in a position to provide heroic deeds. Are you finding business Diane Newman is the Operations Director for WWL and some- getting more robust now? times people want to talk about how radio has become corporate I think there’s going to be good demand and we’re experiencing and not local. Here’s a radio station that was totally local and more surprising levels of business than what we’d expected. At Diane is as local as you can get. She is born and bred here. least faster than what we’d expected. The potential is great, how- Diane through this, and as did Dave Cohen, and so many of our ever I have not idea what it’s going to be. We’re going to be programmers they worked, they just worked non-stop. I mean prepared for it and we think that the relationship that we had they were working 48, 72 hours without sleep, without rest. Diane with the community—both the business and our viewers—was is so passionate about her product that she agreed to appear good before and now we think it’s stronger based on our ability. before the FCC and talk about the importance of terrestrial radio While the chips were down, we were there. and the importance of WWL Radio during the storm. I think that RBRi&iTVBRZNovemberi2005 11 FEATURE her passion got through to the FCC and helped them to under- seeing the response teams and the calvary did start coming stand we were truly local and that terrestrial radio did everything to New Orleans. that it always promised it would do and then some. We have so many instances of governmental officials hear- ing the pleas of people on our radio station and that enabled Tell us about the most important functions them to respond so very quickly. Everything from FEMA to your station served. the Red Cross—as soon as our people talk, when some of these listeners are telling their tales they are constantly moni- Certainly I think preparatory services prior to the storm, you tored by the governmental agencies and respective agencies. know information on where to go, how to get there. Every- They call the radio station and they were able to get their thing from storm tracking to special announcements on where messages out. It’s one to one communication times a mil- refugees can go. The contra-flow information that’s neces- lion, word-of-mouth times a million and that’s what really sary to get people evacuated. The different live announce- made this station shine during this crisis. ments that we could hook up with community and state and The information that we were able to garner by having our people in strategic points throughout the greater New Orleans area actually saved the lives of probably 40-50 of our own staff. On the day of the flooding when the 17th Street levy broke, we still had 35-40 people in our main studios in downtown or in the central business district. A call came through, I saw that there was water rising, and I spoke with Dave Cohen who was at the Jefferson Par- ish Emergency Operations Center. He got word to me that the levy had bro- ken and advised me that if we ever thought we could get out of that building, we had to be out of that building within 10 minutes. That was his opinion. As I looked out, the wa- ter was rising. I called our staff to- gether and I told them they had to listen and listen very closely. They had to follow my directions and they needed to follow them immediately. parish officials as to how they wanted to handle the evacu- That was to evacuate, to get in their ations in their respective parishes or communities. As we cars and take this specific route that Dave had given me from got into the hurricane itself then obviously we needed to a remote broadcast location. We got everyone out except for just detail exactly what to do right now. How to handle 12 of us who were later evacuated. So what’s the point in your gas. How to handle your electricity. What to do if the that? The point is not only were we able to provide those water is rising, where to go right now. That evolved then kinds of services for hundred of thousands of evacuees, but into people telling their stories. We got people to talk about also for our own staff. how they were evacuating. When our traffic services were starting to break down, we actually had hundreds of thou- Any advice to other GMs? sands of reporters in the field that were able to talk about First of all I think a lot of our work was in our preplanning. where people can find housing, how they can get out of the Probably five years ago we took our key management and traffic jam or situation and continue on their evacuation route. his people and we actually did a retreat. In that retreat we We then became the source and platform for people to prepared a four-phase hurricane and disaster plan. At times talk about what they went through, to vent, to start to go we even laughed when we said, “Oh my God we’ll never through the healing process. By now everyone has heard have to do that.” But this is such a detailed disaster plan. It’s [mayor] Ray Nagin’s famous talk on WWL. So in terms of right down to how many nails are we going to put into ply- fulfilling our promise of being the voice of the community, wood that will go on the windows. Who is going to pick up he used WWL as the vehicle to get to the President of the food? How much food? How many blankets? How many United States. There was no other way for him to get that flashlights? How many batteries? And the storage of every message out. As soon as that message aired, we started single one of those. Each time we had a hurricane approach, 12 RBRi&iTVBRZNovemberi2005 FEATURE we followed that disaster plan, and that gave us a lot of prac- We hear sales had to do things tice. It’s like a fire drill. Have your disaster plan, work the the old-fashioned way for a while. plan, practice the plan and be prepared to go all-out. And the We had handwritten logs. And when we talk about he- other is to obviously keep calm. Also, in advance, limit the roes, our sales department had to struggle to in order to number of staff that will be involved in the implementation get these very critical messages on the air they were go- of your disaster plan. ing back to technology many have never seen. It Do you have somebody was the old way of doing already lined up to it, we all had to sit down do reconstruction and go well how do we of your studios? do this? It came back very quickly and DePaul We’ve already started it. Most Smith, one of our Senior of our damage was to the ex- Account Executives, was terior of the building, which the first one on the scene are the windows. The interior in Baton Rouge and liter- we’re going to be able to take ally sat here and put logs care of ourselves, mostly take together by hand then care of ourselves. We have a worked with our PDs. mediation company that’s been in and getting that done. The rest of the build- How did Entercom ing, I think because of our offer help? efforts and our pre-planning, Well I’ve been doing this our studios are basically go- for, I’m embarrassed to say ing to be okay. but I’m proud to say at the same time for about 40 DNR, your national years. I’ve never seen a rep, says it’s getting a corporate response to any- thing like I have seen from little robust down Entercom. Right as I was there now. trying to evacuate I had no We had a record month. It’s means of communicating very restrictive. We have with the corporate office. been very, very careful and By the time I was able to selective on the type of ad- helivac out and get our vertising we want to take and people out, Entercom al- what we think is appropriate. ready had five RV’s on the It’s been a lot of insurance way and all of the resources companies, power compa- that Entercom could mus- nies, it’s been cable compa- ter—cash, security, what- nies. Obviously some auto- ever we needed—it was on mobile dealers who do have it’s way within the same units, but right now we’re day as the hurricane. Ev- One of the many damaged offices at Entercom’s cluster in the Dominion Tower, only running 30-second units. eryone from [Entercom as well as Entercom’s damaged satellite gear. We didn’t run one 60-second CEO] David Field who vis- unit in the entire month of September. We had no problems ited our troops here in the field to those that handle our websites, the total resources of with that. We more or less had a waiting list of people that Entercom had been directed to New Orleans. In addition to wanted to be on the air. that, the company quickly established an employee assistance We heard you’re sticking to your rate card program which now exceeds over half million dollars. and not gouging anybody. Anything else you’d like to say? We felt with so many different stations carrying the WWL and Like anything else that happens that’s of this magnitude, it has a the United Radio Broadcasters of New Orleans, we felt we could tendency to get of the mind’s eye of the populace and we can- have probably charged three times what we did charge. But we not allow New Orleans to be forgotten. The reconstruction of felt that it was important that we not send that message, but a this city is going to take a long, long, long, long time. My con- message of fairness, that we’re there to provide a service. cern is now is about what still needs to be reported. RBRi&iTVBRZNovemberi2005 13 ADBIZ ®

ADBIZ ADBIZBy Carl Marcucci [email protected] Katrina and Rita’s effect on business We’ve asked agency buyers and reps about what Katrina’s (and Rita’s) effect has been on national spot business. How did the buys get done? How did the messages change? What are reps doing to help Gulf Coast and New Orleans stations? How has Katrina affected marketing and planning for clients on national/local/regional levels?

“For us, we paid particular attention to Changing the message it,” recalls Carat Americas CEO David Once a disaster of Katrina’s proportion hits, advertisers still need to Verklin. “Because it has affected all parts reach people. But the message and the people drastically change, of of the marketing food chain. It has af- course. One key evolution in that messaging has been to make sure fected the media sellers, our clients both all the right information gets to the right people. “From the fact that in the retail business and distribution. It we have clients in there, unless the client is going to do a specific has also affected media consumption and message, to run a regular sales spot for a retailer that’s a happy, goofy delivery, and product marketing. It cer- kind of spot, running it in New Orleans at this point is not good,” tainly proved to be the perfect storm for reasons Russo. “We said to a couple of our clients, ‘If you want to us climactically and it was a perfect storm come up with a special, more solemn spot, go a head, but don’t be David Verklin in the media business as well. We’ve had running your regular thing. It will just come off as insensitive.’ And as some real major problems. Think about for network, unless you tell the networks to block out that market, Hyundai and the devastation to the dealer network. Think about whatever you’re running, you’re running.” Radio Shack and all of its stores. I mean we’ve really seen a “There are two different situations here,” number of clients affected. You’re seeing a decrease in maga- attests Kathy Crawford, MindShare zine and newspaper circulation, TV ratings, etc. It has affected President/Local Broadcast. “One is the all links in the marketing food chain.” markets that were completely decimated, “At this point we are taking it client by which is a tragedy beyond comprehen- client, particularly on the automotive sion. But from a marketing standpoint, side of the equation,” says Pat McNew, really and truthfully, what happened to PHD EVP/Local Media Network Direc- and where are those people? When are tor of Operations. “Chrysler/Jeep and they coming back? Against that backdrop, Dodge cut back on schedules and moved obviously you don’t want to advertise un- start dates further back into October. til the people are back. I also don’t think Kathy Crawford Much of the situation depends on how it’s right to advertise something in a light- many dealerships are operative, how hearted manner as usual. These people will be sitting there yelling much inventory is available, and how ex- at the television or the radio saying, ‘I don’t have the money! I tensive the damage has been to each Pat McNew don’t have a home, I don’t have anything!’ It isn’t business as usual. location. One of the key client benefits So we’re talking to all of our clients, we’re talking to all of our of spot radio and television is flexibility. Nothing tests this flex- research people, from just a marketing standpoint of what’s going ibility premise more than a disaster. The level of cooperation from on in the marketplace from the people standpoint.” advertisers, stations and rep firms has exceeded expectations.” Interep tells us New Orleans in Q4 is down 50% for national spot “We’ve had a couple of clients that radio, which equates to approximately 1 million dollars. Kevin Cassidy, would have been on right during it, but Interep’s D&R Radio Sales President (reps Entercom stations), says, we pulled it. We had other clients that however, right now from a national spot standpoint the activity has were looking for lost employees, things been extremely robust on a lot of different levels, from a wide dispar- like that. We contemplated running some ity of advertisers. But, again, the message is much different: “Everyone spots, the pricing was crazy, obviously, from Target Stores and other major retailers who are reaching out to because a lot of people were trying to employees to find out if they’re OK and still alive. I’m in Dallas a lot do that,” said Rich Russo, JL Media’s and I heard spots saying, ‘Hey, you’ve been displaced from the Gulf SVP/Director of Broadcast Services. “And region and you’re currently residing in Dallas. You’re eligible for re- I don’t think it was gouging, I just think hire in a Dallas-area store.’ So it’s not just the Gulf Coast—it’s almost a Rich Russo it was the fact that there was probably band surrounding the entire area that has been affected by this.” limited inventory and limited stations. Cassidy says people that wanted to cancel were allowed to cancel. Everybody was running United Radio of New Orleans [the coop- As well, a lot of people took their schedules and reapplied them to the erative simulcast between Entercom and Clear Channel]. Hous- stations that were still on the air. “Normally I could pull up all the ton got real ugly because of it was well.” numbers on our system. But so much of what has happened since has 14 RBRi&iTVBRZNovemberi2005

ADBIZ been done by hand. Because all of the systems that are integrated and group owners were telling us they were computer-based are gone, literally went under water. Computer sys- sending people down there to find out what tems and trafficking and invoicing—all has been done by hand over was going on. So we’ve been actively try- the last however many weeks we’ve been into this.” ing to put out public service-type messages He added, “I think advertisers were also incredibly appreciative that to people in the area.” people like Entercom have said, ‘Hey, the rate is the rate. We are not in “WDSU-TV was a virtual sales opera- a demand-based pricing situation, because if we were, we could frankly tion connected by the Internet to each get probably 4 to 5 times what we’re asking. This is about an emergency other, Wide Orbit, and our rep firm, Eagle,” situation and we need to serve the community first and foremost’.” explained Pat Doherty, Traffic Manager, Matt Feinberg Hearst’s WDSU-TV New Orleans. “Traffic, The big picture production and promotions were in Florida; Backing up a bit and looking at the affected areas on a macro accounting in North Carolina; local AEs were in TX, NJ, GA, FL, NC, scale, in the short term, media agencies have been very under- AL and LA. We used fax, cell phone and the Internet to communicate. standing of the stations’ plight. But business is business and clients’ This setup started drawing to an end on 10/17.” best interests have to be considered as well. Jon Mandel, Chairman/MediaCom US and Staying informed Chief Global Buying Officer MediaCom When infrastructure is impaired, establishing communication of any Worldwide stressed that everybody tried to kind is paramount. Since 9/11, media shops have some pretty com- do the right thing. “I’ve got to say the broad- prehensive plans in place to address natural and unnatural disasters. It cast community stepped up big-time. This starts with establishing communication contingencies. Says McNew: is something the broadcast community “Obviously it’s been difficult but the cooperation has been terrific. should be very proud of, and what to show Station and sales management have been spread out through out the why we need to have a free over-the-air entire region. We’ve stayed in contact with all of our key vendors broadcast system in this country. And we swapping home email addresses, home phones, and cell phone num- tried not to hurt them, but at a certain point, bers. We also have a system of cc’s at the individual stations so we Jon Mandel how much can I translate your pain to my have a back up system in place.” clients’ pain? Because it is a business and we are in business after all and Crawford says Mindshare also has a process in place. “In conjunction have a responsibility to stockholders and so forth. I think everybody tried with our clients, we keep everybody up to the minute on the condition of to make it not as immediate as we probably from a better business sense, the marketplaces. Because it’s one thing to have the television and radio not a heart sense, should have done. But you do what you can.” stations up and running. It’s quite another to have the people you’re adver- He adds, “I think this has affected things, but in the end it will come tising to be back there. And so we have a full process—we’ve called it a back strong, because you’re going to have rebuilding, you’re going to ‘Disaster Recovery Process.’ It all got started after 9/11. The process is the be pouring money into an economy for workers. And they’ve got to minute we know that something like this is going to happen, we advise all eat somewhere, they’ve got to eat something. They’ve got to go to the of our clients that our recommendation is to do X. Y and Z. Then we work movies to get a little relaxation. I mean how many hundreds of thou- [internally] and with our own buying groups that work with the stations on sands of cars were destroyed? So I think it will come back, but I think what’s happening in the markets. I get a report every day.” there’s a short-term hit.” She shared some details from a report shortly after Rita hit: “Lake Did Mandel learn anything from Katrina and Rita, from a planning Charles, LA—The City of Lake Charles was devastated by Hurricane and buying perspective? “We’ve seen this movie before, but there are Rita. There is no power, no water and no gas. The only information I other things—different categories were affected. The coffee business have received is from local reps because the phone lines are down. It was affected more than just within New Orleans. Because there’s an is safe to say that our [blank] schedule is not running. This is the only incredible percentage of coffee that is actually imported into and roasted schedule we have on the air this week. It is unknown when the sta- in New Orleans. So that affected more than just New Orleans—that tions will be back in operations. New Orleans—Still draining the wa- affected coffee advertising across the country.” ter. Radio is still running United Radio of New Orleans with all stations running disaster relief spots. Shreveport—All stations are up and run- Doing things the old fashioned way ning. Only two stations went dark due to failed/damaged microwave As Cassidy said earlier, the aftermath of Katrina and Rita had everyone dish. They expect to be back on the air Wednesday. There were car- doing business the old-fashioned way, in terms of literally everything ried by Time-Warner cable, however.” is done verbally: “Obviously you can’t send out an order via electronic We asked Crawford if she had any other observations about how fax. You can’t fax an order. All of that stuff we take for granted has had disasters such as this affect her job: “Sure, I could tell you that it means to go back to being done verbally over the phone—and even the we have to drop everything and address flights that we have on the air phone communication for a period of time was very difficult to get and all of that. But the most important thing that it makes you realize is accomplished. Almost everything went back to the way we used to do that life is so fragile. And we need to cherish the time that we have, and things 30 years ago.” realize that all of us sitting in front of computer screens in New York “It was definitely old school, attests Russo. “And a lot of them weren’t City are really lucky that we’re not facing this kind of devastation. Some even operating out of their offices. A lot of people didn’t have email, of these people have lost their entire cities. An entire culture, an entire etc. But considering the magnitude of the tragedy, it seems the people way of life. And they had to run to save their lives. It is a nightmare that handled it pretty well.” those of us in front of the computer screens can’t even imagine. We just “We couldn’t even get in touch with anybody,” Matt Feinberg, SVP/ have to thank God that these things don’t happen every day to every- National Radio, Zenith Media Services, tells us. “Some of the station body in this country and we just have to do everything we can to help.” 16 RBRi&iTVBRZNovemberi2005

RATINGS & RESEARCH

RESEARCHBy Jack Messmer / [email protected] he said proportionality is “excellent”—within +/- 10% for ev- PPM ready for a ery age cell. Arbitron officials say the Houston test has proven, among other things, that PPM works just as well in a market digital future with a large Hispanic population and that panelists can be re- cruited from cell phone only households. While the radio industry ponders whether to move to Arbitron’s Meanwhile, TV is still a question mark. There’s considerable Portable People Meters (PPM) for audience measurement, some enthusiasm for PPM among TV group executives, particularly some of you may be wondering whether another industry move could who really hate the data coming out of Nielsen’s Local People complicate things. Is PPM compatible with HD Radio? Never Meters (LPM), but Nielsen has yet to make a decision on whether fear, the Arbitron folks assure us that PPM doesn’t care what to enter into a PPM joint venture with Arbitron to create a single the source of audio is—just so long as there’s audio to encode. ratings currency for radio, TV and cable. Radio, TV, cable, analog, digital, in-store, live, recorded—it The first release of station-level data from Houston showed doesn’t really matter, the audio can be encoded and listening pretty much the same patterns that were seen in Philadel- logged by PPM. phia. “The majority of the time, the demographic and daypart Two commercial radio stations are currently broadcasting in rankings between PPM and the diary for radio are unchanged,” HD in Houston—Clear Channel’s KKRW-FM and Cumulus’ KIOL- said Bouvard. FM. Of course, there aren’t many receivers out there in the Just like in Philadelphia, time spent listening (TSL) is shorter marketplace, but Arbitron Vice Preisdent of Communications for radio stations. Arbitron says that’s because heavy listeners Thom Mocarsky assures us that if any of the PPM panelists tend to over-report their listening in diaries. But since PPM encounter one, PPM will record their listening to HD. (Actu- shows that people listen to more stations, Arbitron says radio ally, there is a third commercial HD station in Houston, Cox should be promoted as a reach medium, based on CUME. Radio’s KLDE-FM. But since Cox is boycotting the PPM test, it With multi-station clusters, radio groups will be able to isn’t encoding in either analog or digital.) At this point, both demonstrate to advertisers that their reach is on par with KKRW and KIOL are using the same encoding for their analog local TV stations. and digital broadcasts. “Should we decide that we want to re- port separately, we have the option of setting up a separate Radio Group Clusters Show encoder for the HD signal,” Mocarsky noted. No Houston broadcaster is yet multicasting in HD, so there’s no Strong Reach vs. TV and Cable potential for PPM reporting any listening to an HD-2 station. But that day will come and Arbitron says it is ready. “We have verified that we have the ability to encode HD sub-channels based on testing performed earlier this year at iBiquity and at a Clear Chan- nel station in Chicago,” Mocarsky said. On the TV side, digital broadcasting is already widespread, although receiver penetration is still lagging. Several Houston TV stations are encoding their DTV signals with the same en- coding used on their analog signals. Thus, Arbitron is not break- ing out analog vs. digital viewing, although it could if separate encoders were used. While the Houston test continues, with data now coming out monthly, Arbitron has begun pressing radio groups to commit to PPM so that the test operation in Houston can become a real ratings currency in Spring of 2006, with Philadelphia (site of the first test, with many decoders still in place at stations) to follow as market #2 around the beginning of 2007. To that There are gains for TV as well. One that particularly excites end, the Media Rating Council (MRC) has begun the accredita- many TV executives is PPM’s ability to measure out-of-home tion process for PPM in Houston. viewing—something that is completely missed by Nielsen’s “We are declaring Houston a success,” Arbitron President for set-top boxes and in-home diaries. Arbitron officials note that PPM Pierre Bouvard told RBR/TVBR. Specifically, he said, the Houston test is finding that out-of-home viewing isn’t just Arbitron met its sample performance indicator (SPI) goals for guys watching sports in a bar. There’s also significant out-of- the Portable People Meter test, with rates in the low 40s for home viewing during the work day. Quite a few people have households and high 20s for persons. With the exception of jobs where they are allowed to watch TV or are exposed to Male 18-24, still a difficult demo for all ratings methodologies, TV in their workplace. 18 RBRi&iTVBRZNovemberi2005

RESTORATIONRESTORATION New standards in resolution reveal old flaws by Gary Adams, Revival Product Manager for da Vinci

Throughout the decades since motion pictures became mainstream entertainment, it’s an understatement to say much has changed. While old-film aficionados may argue that the thematic quality of films has decreased, no one is claiming that technical quality has gone anywhere but through the roof. The rapid deployment of HDTVs in U.S. households, with HD DVDs soon to follow suit, is bringing crystal-clear images to the discerning eyes of an increas- ing number of movie enthusiasts. result, when restoration options were limited, only films with wide What’s the problem with that? Well, no film is technically perfect. audience appeal — and hence only those guaranteeing a high return Many flaws that were once overlooked by post-production houses on investment — were given the resources necessary to bring them up that knew that these imperfections would be masked by lower reso- to a level of quality satisfactory for today’s HDTVs. Many others not as lution TV sets are now becoming evident. The incredible sharpness in-demand yet still representing an important part of cinematic history and color fidelity of HDTVs has made the safety net of low-resolu- were left behind. However, da Vinci, with the development of Revival, tion screens less relevant, placing films under such a microscope has streamlined the tedious tasks involved in restoration by automat- that even relatively modern works can look bad. ing many of them, giving those films hope for a new life. New restoration tools can deal with many problems that arise in The first step for post houses in restoring a film is to physically film from age-related chemical breakdown, poor storage conditions, remove as much dirt and dust as possible using chemical or optical mishandling, and regular wear and tear. While restoration tech- processes, and then digitize the material. The “ingest” process usually niques have existed for some time, the process was time-intensive involves film scanners that record the data onto a facility’s digital stor- and cost-prohibitive for all but the most in-demand films. In 2001, age, such as a centralized media server. however, da Vinci Systems launched a set of sophisticated digital Once the material is ingested, the data can be processed with Revival. restoration tools—packaged as “Revival,” that automates many of By running automatic processes that can be defined by the user, Revival the most challenging corrections, making it financially more fea- will stabilize the film and remove flicker as necessary, and then locate sible to restore even niche films. and eliminate dirt, dust, scratches, fingerprints, and other similar de- fects. The automation can correct a stain on one frame, for example, by Dangers of deterioration analyzing the frames immediately preceding and following the dam- Motion picture film is a chemistry marvel, but despite its many capa- aged frame. Since 24 individual film frames are being displayed every bilities, it is very vulnerable to damage in any number of ways. Envi- second, with little difference between each one, such an analysis often ronmental conditions are one common culprit. Under high enough reveals undamaged areas that can be used to reconstruct missing data. levels of heat, humidity, and often both, the color balance of an image For intensive restoration projects, post houses can supplement these auto- will fade as the film actually starts to break down chemically, resulting mated processes with manual corrections. Revival has a full-featured set of in an unappealing stained or faded look. interactive tools that can be readily utilized for more fine-tuned repairs. Image instability is also common in older films. It can result from uneven, climate-caused shrinkage or simply from heavy usage. The Outputting to video sprocket hole tolerance of film is tight, and repeated projections— Because restoring a film for TV requires a significant investment of complete with frequent, stress-inducing stops and starts—can cause time and money – even after Revival’s automated processes streamline the film to loosen. much of the work – studios often utilize the opportunity to preserve Film is also sensitive to scratches, which can occur during even the the repaired material in a variety of formats. most sensitive handling and even by projection machines themselves. The optimal workflow is to scan the film at the highest-possible reso- Flicker, caused by fading dye layers, can also be a pervasive problem. lution, 4K. By doing so, ample resolution exists for all the different And dirt and dust are nearly ubiquitous, even with brand-new films. formats of distribution. The full-resolution 4K version is sufficient for Dirt and dust become particular concerns while authoring HD and SD recording back onto film. Video itself has multiple varieties of format DVDs. Any dust left at this stage could create compression artifacts, resolutions derived from the 4K master: HD for a growing list of chan- reducing the overall quality of the picture. nels and new-to-market HD DVDs, and SD for most broadcast chan- nels and regular DVDs. Even within those standards there are differ- Restoring film for video ent aspect ratios: 1080/letterbox and 720 for HD and 625/525 for SD. Recorded at 24 frames per second, a full-length film may contain a And there is PAL mastering for overseas use in addition to NTSC do- couple hundred thousand individual frames. The time it takes to re- mestically. If a film master is not needed, an HD-resolution scan of the store films frame by frame is astronomical, and so is the price. As a film is enough to cover all these bases. 20 RBRi&iTVBRZNovemberi2005 NEWS/TALKNEWS/ TALK and music selling tool than radio itself. People Sell People, you see. HOW NOT TO GO GENTLE Radio stations don’t have personalities. People do. And over time, as legions of end-of-quarter, out-of-town consultants touted “stationality”, INTO THAT GOOD NIGHT our people vanished. Some high dollar statistics-jockeys say radio is not losing national Honest Assessments, Promising audience share and ad dollars to innumerable media competitors. The Ideas, and Raging Leadership RAB, for instance, may tell you everything is hunky-dory. But your daughter has never heard of the RAB. She may never have voluntarily in radio’s critical phase. tuned in to a terrestrial radio station, and what is more, you probably gave her an XM or ipod unit for Christmas. So why aren’t you filthy rich? By Franklin Raff Because the FCC hasn’t fought hard enough to control intramural com- Our job is to make and market a live, creative audio product. David petition? Because radio reps can’t get our overextrapolating yes-mens’ Ogilvy’s old mantra - that creative people are the foremost assets of a glossy-print messages across to advertisers? Of course not. It is because creative business – is only a profit-unfriendly concept in the very short our own children don’t listen to the radio anymore. Ask them why and term. The short term, for us, is over. Our they’ll tell you. “Get real. Radio sucks.” customers – captive listeners, and, in turn, So when you ask yourself where all the advertisers – wait like babushkas on a bright kids went, remember: This genera- bread-line for some semblance of com- tion will not have grown up with radio. No pelling content. The golden eggs are dwin- Zeniths under the sheets. Night moves by dling and it’s time to feed the geese. That is the dashboard lights are now illuminated to say, in order to improve our manufac- by LCD: Side2-LedZepIV-Mp3, at best. Ra- turing potentiality, we must reevaluate and dio is “old” to our elseways replacements: optimize the talents and capacities of our our blinking towers are not symbols of ex- people. When you have finished reading this citement, mystery, romance, wealth, and article, you will at worst have a few con- possibility, as they have always been to crete, if unconventional, views and ideas me. To our successors they are crumbling in your mind about how to do this on the monuments to a bygone era of oppressive cheap. In the process, I aim to provoke commercial content and limited choice. and inspire you to action. It’s time to clean up the mess we made What kind of a person were you when when we cookie-cuttered our creatives, de- you first got into radio? I’ll bet you wanted incentivized our hottest reps, and other- to make a difference, you wanted a cre- wise robbed our most purposeful people ative outlet, and you needed money. You of their very purpose. We have to get became a performer. Perhaps you were people like us back. To do that, we must initially attracted by life on the air, as I re-instil, in our industry, what attracted us was, but found performing in the pro- to begin with: Freedom. Creative and jour- duction studio, the boardroom, and the nalistic power. Fun. Unpredictability. The client’s office just as much fun. As I do. good news is that we are perfectly posi- But at some point, you had a choice and tioned, strategically, to make this transition. you chose radio. You chose it, you stuck with Gush Katif, Gaza. Disengagement: Franklin Raff secures the Arutz It may not matter to you that net-shocked it, and now you define it. Do you believe Sheva “war wagon” as Kassam rockets fly overhead. newspapers, plagued by an expensive and that your successors are as bright as you inexcusably slow medium (paper/press), were, or have the same inherent options, based on their talent, training, are laying off future radio employees. It may not matter that outdoor can’t upbringing, passion, discipline and drive, that you did? Answer quietly. win hearts or that the Yellow Pages can’t pre-seal a purchasing decision “Forget it.” That’s what the OM of Yale’s college radio station said to or that radio is the only cost-effective internet and commute-friendly ad- me during the latest of my annual summer calls for promising gradu- vertising and information-delivery medium on the planet. What matters ates. “The kids just aren’t interested in radio anymore.” Indeed most most, in a time requiring foxhole creativity and dramatic action, is that we of the great “old” college FMs, the last tooth-cuttin’ torchbearers of the have absolutely nothing to lose. free-form programming revolution of the sixties and seventies, have Media fortune-tellers, for whom Negroponte is Nostradamus, hail been NPR’d, PRI’d, PSI’d and LMA’d out of any singular existence. always-on, full-band, global interactive access as an endgame assimi- Medium – I-pod, broadband wireless – seems a greater fascination for lator– leaving radio in the margins of a postapocalyptic media grave- us and for the enterprising souls who once manned our talent-farms yard shift: the redefinition, distribution, and management of whatever than content itself. Is that any surprise, when HAL and the Robojocks inventory we can scrounge, peddle, and stuff into a hot-clock. Many have been “entertaining” our heirs for the past decade? A friend at industry professionals believe we can make lemonade from these rinds. SONY Music told me recently that Seventh Avenue – the fashion trade They are dead wrong, and they have forgotten radio’s unique selling – is for the first time widely considered a more effective “hitmaker” proposition. The way out of this mess is in our blood. Everybody knows RBRi&iTVBRZNovemberi2005 21 NEWS/TALK we need to “get local” - to deliver live, exciting, imaginative, unpre- “death-cycles” of large freshwater lakes. Catch my drift? Radio, be- dictable, target-focused content - in order to win. We have always cause of its negligible preproduction time, can vet, produce, and get known it. “Local” is the only USP terrestrial radio outfits ever had. The to air faster and with a broader scope than anyone. And if you can’t laws of positioning affirm it’s the perfect USP in an increasingly “glo- grasp the mandate, hire a local journalism grad with theater experi- bal” network media environment – and radio is the most quickly pro- ence and as much history in his head as you can muster. Give him a duced, easily delivered media widget in the world! So why are jocks in cellphone, a laptop, and a portable radio. Give him pride and free- top-ten markets staring at TV monitors? Why haven’t we capitalized on dom, and send him out on the street. His job is to file :30 or :60 stories the disenfranchisement of the thousands of newspapermen who would every few hours, with a backup or two and an evergreen loaded (via come over to radio in a VM?) by 0700. Can’t find your man? Try this: heartbeat and for pennies, “Media fortune-tellers, if only our hot-clocks gave LOTS OF FOLKS WILL TELL YOU THAT YOU HAVE TO BE POOR IN for whom Negroponte ‘em a chance? Why is ev- ORDER TO ENJOY TOTAL CREATIVE FREEDOM IN YOUR JOB. THEY ery cell phone not a Marti: ARE WRONG. THIS JOB INVOLVES NO CUBE-TIME, NO SUCKING- is Nostradamus, hail why don’t we give out UP, NOT A SINGLE FILE CABINET. WE NEED CULTURAL LITERACY, always-on, full-band, prizes for the best phone- IMPROVISATIONAL BRILLIANCE, A GOOD ACADEMIC TRACK global interactive fed / listener submitted au- RECORD, PASSION FOR NEWS, KNOWLEDGE OF THE TOWN, AND dio? Why do we still load FEARLESSNESS. WE’RE WXXX RADIO. THERE ARE NO RULES OR access as an endgame PIs into endless spot sets as INSTRUCTIONS. THINK OF AN UNUSUAL WAY TO APPLY FOR YOUR assimilator– leaving if we expected our listeners NEW CAREER WITH US AS AN ON-AIR JOURNALIST. WE ARE WAIT- radio in the margins of to skim, search, and seek ING TO HEAR FROM YOU. EOE. /30 themselves out of terrestrial a postapocalyptic radio listening habits once “No time to interrupt the hits”, you say? Ask radio legend Bill Drake about media graveyard shift: and for all? Why, at the very The Great CKLW’s top-40 news department. And before you scoff, study the redefinition, dis- least, aren’t we making that station’s mind-boggling ratings history over the course of twenty tribution, and manage- “news” out of our local ad- tears and half as many markets. “Too expensive”, you say? Bogus. Your vertisers’ interests? There are new employee’s salary, car, gas, and equipment should be a fraction of ment of whatever scores of cost-effective ways the sponsorship value. If you can’t make that happen, ask Chris Lytle for inventory we can to put your finger on the a refresher course, slither down to a more comfortable market, or tell scrounge and stuff into pulse of your market. Radio your dapper little middle manager to buzz off for a quarter while you is immediate. Observe the rescue the industry. Best-case scenario? See if you can blow out the middle a hot-clock. Many sunrise. Think of a new way manager. Take one-fifth his dough and hire someone twice as talented, industry professionals to please your listeners. right out of college, who doesn’t know how to pronounce the letter “W”. believe we can make Implement by sunset. Get a decent web-stream set up (you need to establish it – no time to Radio desperately needs explain here) and give the rest to that print agency or some other aspiring lemonade from these local leadership, our adver- charity. Give your new star the speech on pronouncing “W” and “Neeews”, rinds. They are dead tisers need improved re- pepper some war stories with call letters, drink a bottle of lousy scotch wrong, and they have sults, and our best reps, together, pass the torch, and go home. GMs, PDs, and SMs need to Tomorrow you can ask your daughter if she heard about how trigo- forgotten radio’s stop blaming their paltry nometry is basically “out” according to all the top math teachers and Unique Selling incomes on “The Industry” professors, and that the “old math” is, you know, like, being trashed Proposition...” we ourselves control. So: and half the math teachers in the country are TOTALLY clueless and Get that ridiculous print still assigning trig homework. Hadn’t you heard? It was on the radio. agency graphics job off The bleeding has stopped. You have secured new competitive ad- your desk. We paint our pictures with words. Remember what all the vantages in a new media environment, you have optimized the unique boneheads wrote in the industry trade journals between planning selling proposition of a terrestrial tower-based audio content provider. meetings with syndicators, jock-automators, network-‘news’feeders and You, the maker and seller of an audio widget, have catalyzed a revo- audio hard-drive backer-uppers? Starts with “get”. Ends with “local.” lution in HR and manufacturing models. Moreover, in an era in which Getting Local is an exercise in circumstantial relevance, and does not radio stations and groups once alternately screwed and benchmarked necessarily indicate any sort of geographical area. Local isn’t always – chased - each other like lemmings copulating en route, you changed where your best listener lives, but it always encompasses topics and direction first in your market. Ries and Trout were right, after all: themes he cares about. That’s why the newsgathering power of the category leadership, no matter now tumultuous the pole position may internet is the best thing that ever happened to local radio. Use the be at first, ensures a legacy of commercial success. Your people are ‘net – portals like freerepublic, worldnetdaily, drudgereport – and let both hungry and fulfilled, your ratings and revenue are on the way your plugged-in listeners help you break local news and national news up, and you can start having fun again. of local import before your competitors do. By giving them friendly “source” credit and kudos from time to time on the air, you can simul- Phew! That was a close call. taneously appropriate what draws millions to the blogosphere. Google ______has an infinite-source “custom news” feature that will blow your socks Franklin Raff runs RRMG, a radiocentric creative and consultancy agency off: Do you work in coal country? The ‘net offers 5 new coal stories of in Washington, DC. He is a senior producer at Radio America, and one kind or another every day. (They’re making diesel out of in Canada Executive Producer and imager of The (New!) G. Gordon Liddy Show. – like the Nazis did). Chicago? New research out of Norway on the He may be reached directly at (703) 966-9892. 22 RBRi&iTVBRZNovemberi2005

ENGINEERINGENGINEERED FOR PROFIT Gary Kline, Cumulus VP/Engineering, on preparing for big storms

We really had two regions affected. Mo- A and B, how do we them back on the air from another bile/Pensacola is one region. The markets tower? Or can we? Or which one do we put on first? If I are within an hour of each other. Our en- lose a generator, or generators in various sites and they go gineers work together as a team and re- off air, what are our backup plans? Who are we going to ally any weather that’s going to threaten call? Do we have spare parts? We think of all the different one of the cities generally threatens the scenarios. What happens if the studio is down to the point, other. Mobile and Pensacola were threat- let’s say in Beaumont, where we cannot use it at all? Or ened by Katrina, which really hit New Or- it’s not really damaged but they won’t let us into the area. leans. There was a certain amount of dam- They force us to leave the building. In Lake Charles we age in Mobile. It turns out Pensacola re- had a few employees that did stay, the police came by and ally escaped a lot of damage. Then a few told them they had to leave, they forced them to leave. weeks later we were hit by Rita in Beau- Then they came back in a couple of days later when they let them back in. Well what mont and Lake Charles. We basically es- happens if they don’t let you back in? And what if it was totally damaged? caped harming the studio building in So in the scenario of design phase of the modest to worst case, I lose a transmitter Houston, but we did not escape harm to site or two and I lose my studio. So what do you do? Do we ISDN it in from another the transmitter sites. market like Shreveport? Do we get portable satellite uplink and downlink, to go any So what we do when we know a storm transfer site? What about if my STL tower to the studio came down and now I can’t get is coming and we know it’s time to get worried about it—we go into emergency planning mode. Our engineers start check- ing generator fuel levels, oil levels. They start testing the generators. We make sure “That's All Right Mama!” they’re all fueled. We make sure they run. We make sure they run under load when — Elvis Presley in his radio debut on WHBQ Memphis. they transfer them to the transmitter site. July 5, 1954 We put them into a full, complete test. We make sure all station vehicles are gassed. We make sure that all the vehicles are run- THIS HISTORIC MOMENT IN RADIO HISTORY ning. We make sure the station vehicles is brought to you by Dielectric where our talent and that are not absolutely necessary are moved experience is rivaled only by our love and to a safer point. There’s no sense in bun- respect for the power of radio. dling them all together only to have a storm knock them all out. We start preparing the studio—testing stu- You can’t predict when the next historic moment is dio generators, backup systems, UPS’s, flash- going to happen at your station, but you can depend lights, batteries. You test your transmitters, on Dielectric to help deliver it to your listeners your backup transmitters, your studio gear. the instant it does. We also came up with a game plan before the storm of what we would do under dif- ferent scenarios. From modest to worst NEVER UNDERESTIMATE THE POWER OF RADIOTM case—what do you do if you lose tower A, B, C and D? If you lose one of your towers, what’s the plan to get that station back on the air? What other tower can we move it to? Who’s going to prepare the STA? Where are we going to get the antenna and the line? 1-866-DIELECTRIC Engineering Excellence TM What tower is the most likely tower that we www.dielectric.com from Base to Beacon would move station A to? If we lose towers 24 RBRi&iTVBRZNovemberi2005 a signal to any of my stations—which one is clos- est? What’s my backup plan? And then maybe I put tuners at all my other stations so I can simul- cast—pick one up off the air and daisy-chain. We designed and talked about scenarios. What is the complete backup scenario plan? For ex- ample I called Harris and made sure they had backup 1-kW and other-sized transmitters to be shipped at a moment’s notice over the weekend. I called Dielectric to make sure they had anten- nas and transmission lines stocked. Even single- bay, broadband antennas—we made sure that they had emergency gear to ship to me so I could do something. I had that on the standby.

The leaning tower of Vidor

There are components here, there are logistics. So I have transmitters on backup and I have anten- nas on backup. How do you get it in there? How are we going to ship it in there? Which roads are opened and closed? How are you going to airlift it? Some of those things you just don’t know until the storm hits. But those are on your mind. You’re also thinking where’s my nearest drop point? Who do I have and what commercial vehicles do we have and what trucks do we have to at least pick it up from some nearby point and force it in ourselves if we have to. Because UPS still isn’t delivering to our studios in Beaumont as of yesterday (10/11). We had some loaner STL equipment shipped in we needed because one was damaged. It was shipped, but it got turned around because UPS wasn’t deliv- ering. I can guarantee you some trucking services and whatnot are going to have some trouble. So another thing I did was talked to other broadcast- ers before the NAB convention from the other ma- jor groups that are in Houston and talked about what each of us was doing and who we were bring- ing in and we all kind of agreed to help each other out if possible. In the terms of Beaumont and Lake Charles, Clear Channel treated me like family. They loaned me a generator from Baton Rouge that they had left over from the New Orleans storm. Of course I would do the same for them. When this came, we all broke down the barriers. Univision stopped RBRi&iTVBRZNovemberi2005 25 ENGINEERED FOR PROFIT by one night, Dave Stewart loaned me a 1-kW FM transmitter, building in Mobile where we were knocked out of alignment. which we used in Beaumont. Some flooding at the transmitter sites. Their 2,000-foot American And depending on the seriousness of the storm, we’re also Tower has three FM’s—WYOK, WJLQ and WBLX. WYOK and preparing for food and for emergency personnel to stay in the WBLX are Mobile stations and WJLQ is Pensacola. They are all radio station. Waiver forms—we start discussing with employees, 100-kilowatt stations. Some wind damage and a few loose cables depending what the local authorities determine is mandatory or on the tower. They all lost power but had big generators, so were voluntary evacuation. We discuss what it means. Because if it’s never really were off the air. The T1 line never went out so there mandatory, everybody must leave. Or I’ll let you stay, but you were very few off-air outages. Both AMs were off because of stay knowing that there is some risk and you may not have help power loss and no generator. of local authorities. So we ask people to sign a waiver if you stay Beaumont: The Vidor, TX site suffered very extensive damage. A behind under mandatory conditions. couple of trees fell across the tower or the guy wires to the tower. We then discuss with the employees who’s going to stay, who’s The tower was leaning a couple of feet. There are two stations on going to go. We also make lists of where people are going if they that tower from Cumulus, which owns the tower—KQXY and KAYD. are taking off from town because they may go to relatives’ homes KQXY stayed on the air even though the tower was leaning heavily in other states that you have no and they thought the tower was knowledge of—some second in danger of coming down. It cousin in Iowa. Well we don’t was then off the air. The wind know who they are so we had ripped the transmission line would like to know where you from the antenna and threw it are at so we can call you, up- on the ground. date you on the situation in the Lake Charles: Damage to market, tell you when it’s safe to the studio with the roof being come back and distribute the pulled off slightly and a leak. other information you need to The AM site transmitter build- know. We make checklists of who ing was damaged and left lean- is going where and who will be ing. A remote vehicle was where in addition to who is stay- brought in to make a tempo- ing behind at the radio station. rary transmitter room. KQLK- In the case of Houston/Beau- FM also went down. mont/Lake Charles, our engineers Houston: The Winnie and had to get their families to safety Devers transmitter site runs Cu- and then come back into town. mulus’ two Houston FMs, KFNC Because we weren’t sure how Remote vehicle to the rescue and KIOL. The stations were easy or hard it would be for them running on generators whose to get back into town after they left, we brought engineers in from tanks were topped off before the storm but they’ll only run two, out of town so that there was backup there. two and a half days each so they had to get fuel for them or they One of the things that I learned in this particular go around is would die. The first go around Kline spent about $15,000 in labor, it’s so much easier for an engineer if their family is safe, dry and fuel and transportation costs just to get the generators filled the first his home is not in an affected area, to concentrate on the job. My couple of days. The stations stayed on at full power—100kW. local engineers have trees through their house, they have to make Said Kline: “The Winnie site, that’s a 2,000-foot tower, looked sure their family is okay, make sure their family has enough money good on the ground, but I had an inkling. I said to my superi- to stay in the hotel that they are staying in. It’s a different world. ors I want to send a crew to climb each of these towers. I just So they are a little preoccupied. It makes a lot of sense to bring want to make sure up high, because we knew what the wind an extra people from the outside in for a serious storm to lend a and the rain was like at ground level, but at 2,000 and 1,500 hand because they can focus more. We have a lot of great people feet it’s vastly different. So I said I just want to have a struc- that were in the affected areas that stayed behind that showed a tural and visual inspection done on these towers. Well the crew lot of determination and focus. I don’t want to downplay their called from the Winnie site and told me at about 900 feet some hard efforts and our engineers did an outstanding job. They got of the hangers that hold a four-inch rigid transmission line (we back into town about a day after the storm had left and worked have two lines, a main and a backup) were ripped off. We just round the clock everyday sleeping on the floor with no air condi- ordered 80 of them and they latched it up with some rope and tioning, not very much food and not very much to drink. temporarily fixed it. But it needs to be corrected properly. It’s an important thing to note if you do an inspection on the ground Damage to Cumulus stations and you don’t see any damage, make sure that if you’ve gone Mobile/Pensacola: Some damage to the AM station. WGOK was through a big storm like that, my advice is that you get some- off the air for several days without power. WDLT-FM’s main site body to climb or look at that tower. Antennas can be bent, generator had a technical snafu and burned part of the mecha- lines can be punctured, small things can happen. All it takes is nism out when it attempted to run. Switched on the low-power a little water seeping into the connector to cause you a prob- backup at the studio. The satellite dishes on the roof of the studio lem down the road.” 26 RBRi&iTVBRZNovemberi2005 STATION UPGRADESUPGRADES Central to this thinking, of course, is whether there are opportuni- Do you know what ties for any particular station to increase its demographic reach, and that is where the “move-in” oftentime comes into play. Move-ins be- gin with a developmental engineering consulting company. The engi- your station is worth? neering part is to figure out how a station can become a bigger player in its market or in a larger nearby market. The development part is A station “move-in” can make making the engineering plan a reality. These upgrades and move-ins are taking place all across the a world of difference country, from Asheville, NC to Phoenix. From Boise, Idaho to By Ed Seeger Philadelphia. Co-founder Andrew Guest and I have been in the radio business for more than 60 collective years. Through the years, There are dozens—no, hundreds—of station owners in this country we developed a growing awareness that there are an unknown, who are sitting on property that is much more valuable than they but potentially a very large, number of opportunities to design think it is. successful FM station move scenarios. That’s why we decided to How can I say this? Because since we founded American Media form AMS, because we knew we had found the successful for- Services in 1997, we have worked with 20 properties, just a small mula to make our clients’ assets more valuable in a stunning way sampling of the thousands of stations in America. In those seven while serving the public interest. years, we have increased the aggregated value of those properties All hype aside about satellite radio, conventional radio stations have from $47 million to over $192 million. a great deal of inherent value – and smart owners can find ways to The current projects we have in the pipeline will, upon completion make their holdings even more valuable. of our work, result in additional increases in valuation of another $200 Take Jack Russell of Texas, for instance. We successfully worked million once the proposed rulemakings are approved by the FCC. with him on a project that ultimately saw his property increase its That’s why, after more than three decades in radio, I’m still bullish power from 6,000 watts to 100,000 watts, and that’s after we moved about the future for our medium. Over the past several years, we his city of license 50 miles closer to Dallas. have all watched as the new technologies have been developed and In order to get that done, we had to convince 15 other station own- have taken their place in the marketplace. First it was Internet stream- ers stretching from Oklahoma to San Saba, Texas, that various changes ing. Next came satellite radio, Ipods and podcasting. were in their own best interest to allow Jack’s station – KEMM – to What, the skeptics begin by saying, is going to happen to radio? It’s make the move to Dallas and subsequently increase its power. The going to disappear, it’s going to be replaced, it is a medium that is KEMM filing, in turn, became part of a larger filing AMS coordinated becoming irrelevant to the American public. And yet, that doesn’t that involved 42 changes to the FM Table of Allotments and upgraded seem to be happening. several other stations. It took almost two years to get all of this done, Sales trends and revenues are stable or increasing, albeit not as and by the time we had completed the rulemaking, we learned from much as all of us would like to see. Listenership is up. The industry the FCC that this was the most complex rearrangement of radio sta- is taking note of the changes it must make in order to retain current tions that had ever been granted. And it was a win-win for everyone, listeners and recruit new ones, changes such as emphasizing localism, including the listening public. re-evaluating ROI measurement, encouraging the 30-second commer- Russell purchased the station when it had little revenue. He cial and shortening commercial breaks. developed it as best he could, but it was, he told us, essentially a As I talk with station owners, I am finding a renewed excitement Mom and Pop station until AMS enabled him to broaden his hori- about what the future holds for us, a growing recognition that there zon. AMS, on Russell’s behalf, negotiated with potential buyers, are new opportunities for all of us to engage and interest our public. and ultimately we reached an agreement with ABC Radio to lease If there is any doubt among you that radio is not addressing these the station at 50,000 watts and eventually to buy it. It became the important issues, a quick look at the session topics at the NAB Radio 100,000-watt KESN in Dallas. Show in September should give some reassurance that we are headed Since 1997, we have concluded 19 other transactions that sound a in the right direction. “How to Stop the Body Blows to Radio’s Im- lot like Jack Russell’s. In some cases, the station’s value increased age,” “Future of Radio,” “Selling Radio in a Digital Age,” and “Profiting more or less dramatically than KEMM’s. One station grew from an from New Technology: Ideas from Around the World” are samplings estimated value of $548,000 to $3.5 million once we had completed of the programs held in Philadelphia, and they demonstrate how this the upgrades. Another deal we coordinated took even our breaths industry’s leadership is meeting the technology challenges head-on. away, as we worked with a Northeastern station owner on a very As we met with station owners at the Radio Show, I noticed a complex upgrade and move. When it was all over after three and a new assertiveness and a new forward-looking attitude among many half years, that station, which had been valued at $2 million, was of them. They are interested in the new technologies, they are successfully sold for $35.5 million. Imagine if that opportunity to eager to learn more about them, and they are making sound deci- create value had been missed. sions to ensure their stations remain relevant to their markets. As they grapple with these new opportunities, they are going back to (Ed Seeger is President and CEO of Charleston, SC-American Media Ser- the basics to ensure that their stations are positioned as strongly as vices, with offices in Chicago, Dallas and Austin, TX. For more info, click they can be in their markets. on www.americanmediaservices.com or write to him at [email protected].) RBRi&iTVBRZNovemberi2005 27 MEDIA MARKETS & MONEY

MEDIA MARKETSBy Jack Messmer / [email protected] tiple of the estimated $16.8 million in 2005 BCF. Two of those stations are in espe- Emmis stations cially hot growth markets, Ft. Myers-Naples, FL and Tucson, AZ. Journal also has radio properties in two of the markets, Tucson and Omaha, NE. command George Lilly’s SJL Broadcast Group, with backing from Blackstone Group, is esti- mated to have paid 13.3 times 2005 BCF of $19.5 million in its $259 million deal to buy four stations, including Emmis’ #2 biller, KOIN-TV (Ch. 6, CBS) Portland, OR. strong multiples LIN Television is buying the most stations from Emmis—five in all for $260 million. Some Wall Streeters seemed to believe that Miller figures that to be a 12.7 multiple of $20.5 million in projected 2005 BCF. Emmis Communications might get as little as Gray Television is buying only one station, WSAZ-TV (Ch. 3, NBC) Charleston- $900 million for its TV group, but we at RBR/ Huntington, WV, which fits right in with its regional strategy. The analyst pegs the TVBR has pegged the price in the $1.2 bil- $186 million price tag as a 10.5 times multiple of projected 2005 BCF. lion area right from the get-go. As this issue What’s left? The big kahuana. Miller predicts that WKCF-TV (Ch. 18, WB) Orlando— went to press, the tally was at $940 million, the top biller in the Emmis group—will have BCF of 18.5 million this year. He looks for with three stations left to be sold, including the buyer to pay a multiple of 13-14.5 times, which would mean a price of $240.5- the most valuable of all, WKCF-TV (Ch. 18, 268.3 million. The analyst sees $10.7 million in BCF at the other two stations, with a WB) Orlando. So, it looks like the final fig- likely multiple of 10-11 times, or $107-117.7 million. That works out to a total price tag ure will be pushing $1.3 billion. of $347.5-386 million for the remaining stations, boosting the total overall to a range of Jeff Smulyan sounded vindicated when $1,287,500,000 to $1,326,000,000—or roughly $1.3 billion. he spoke about the TV sale in a Q&A posted RBR/TVBR observation: Why is it taking so long to sell the “crown jewel,” WKCF? on the company’s website. “Wall Street has We hear there are doubts by some potential buyers that there’s much upside left in the been down on TV values for a long time. property. Ratings for the WB network have not been impressive in the past year and When we announced our intentions to sell, Emmis runs the Orlando station so well that the next owner isn’t likely to do any better some analysts estimated the group’s value at $900 million, but it’s clear we’re likely to exceed that by several hundreds of mil- lions. I wouldn’t say I feel vindicated by the agreements we’ve made so far. We knew there were people out there who want to focus on TV, who would see greater value in it. We’re trying to create value for our shareholders and employees, and I’ve learned that we can’t do that unless we move the needle,” the CEO said. As this issue went to press, Emmis had announced four deals to sell 13 TV stations for $940 million. Of the three stations remain- ing, Smulyan recently told analysts that ne- gotiations for the sale of WVUE-TV (Ch. 8, Fox) New Orleans have been complicated by Hurricane Katrina. The station has been operating out of the studios of WALA-TV (Ch. 10, Fox) Mobile, AL (which is due to be sold to LIN) since the storm flooded New Orleans. Bear Stearns analyst Victor Miller has been crunching the numbers on the four deals announced by Emmis and found that they commanded healthy cash flow mul- tiples—a multiple of 12.6 overall on an esti- mated $74.5 million in 2005 broadcast cash flow (BCF). He assigned the highest multiple to the pur- chase of three stations by Journal Commu- nications for $235 million—a 14 times mul- 28 RBRi&iTVBRZNovemberi2005

MEDIA MARKETS & MONEY

than keep pace with the market. Also, it’s the originating station for the “Daily Buzz” young- demo-oriented daily news/entertainment show that Emmis co-produces with ACME Television and Emmis is also looking to sell its share of the show as it exits the TV biz. In filing its latest quarterly report with the SEC, Emmis said it might take three months to a year to complete the sale of the remaining three stations. Emmis Communications TV sale scoreboard

CALLS Channel Affiliation Market Name (Buyer) Market Rank Revenue-Station 2004 Radio & Television Yet to be sold Business Report WKCF-TV 18 WB Orlando-Daytona Beach, FL 20 44,000,000 WVUE-TV 8 FOX New Orleans, LA 43 19,500,000 November, 2005 KGMB-TV 9 CBS Honolulu, HI 71 13,500,000 Volume 22, Issue 11 Sold to Blackstone/SJL for $259M Publisher & Editor...... Jim Carnegie KOIN-TV 6 CBS Portland, OR 24 36,000,000 KSNW-TV 3 NBC Wichita - Hutchinson, KS 66 15,500,000 Managing Director ...... Carl Marcucci KGMB-TV 9 CBS Honolulu, HI 71 13,500,000 RBR/TVBR Staff KSNT-TV 27 NBC Topeka, KS 137 6,700,000 Executive Editor ...... Jack Messmer Sold to LIN for $260M Managing Editor ...... Dave Seyler KRQE-TV 13 CBS Albuquerque-Santa Fe, NM 47 24,000,000 Senior Editor ...... Carl Marcucci WBPG-TV 55 WB Mobile, AL-Pensacola, FL 63 2,050,000 Production Manager...... Michael Whalen WALA-TV 10 FOX Mobile, AL-Pensacola, FL 63 18,000,000 VP Administration ...... Cathy Carnegie WLUK-TV 11 FOX Green Bay-Appleton, WI 69 16,000,000 Administrative Assistant ...... April McLynn WTHI-TV 10 CBS Terre Haute, IN 149 10,100,000 Marketing/Sales Director ...... June Barnes Sold to Journal for $235M Corporate Office WFTX-TV 36 FOX Ft. Myers-Naples, FL 68 18,500,000 Radio & Television Business Report KGUN-TV 9 ABC Tucson, AZ 72 16,500,000 2050 Old Bridge Rd., Suite B-01 KMTV-TV 3 CBS Omaha, NE 76 13,950,000 Lake Ridge, VA 22192 Sold to Gray for $186M WSAZ-TV 3 NBC Charleston-Huntington, WV 62 33,000,000 Main Phone: ...... 703/492-8191 Editorial Fax: ...... 703/997-8601 Source: BIAfn Media Access Pro Subscription Phone: ...... 703/492-8191 Subscription Fax: ...... 703/997-2677 Email Addresses The Liberty Corp. TV group heading to Raycom Publisher:...... [email protected] Editorial:...... [email protected] CALLS Channel Affiliation Market Name Market Rank Revenue-Station 2004 ...... [email protected] WAVE 3 NBC Louisville, KY 50 24500 Sales:...... [email protected] WTOL 11 CBS Toledo, OH 70 23900 Bradenton, FL Office WIS 10 NBC Columbia, SC 83 19700 Jack Messmer WLBT 3 NBC Jackson, MS 91 17700 Phone: ...... 941/792-1631 KGBT-TV 4 CBS Harlingen-Weslaco, TX 93 8000 Fax: ...... 253/541-0070 WFIE 14 NBC Evansville, IN 99 15300 Email: ...... [email protected] KLTV 7 ABC Tyler-Longview, TX 111 20000 Columbia, SC Sales Office WSFA 12 NBC Montgomery, AL 113 15800 June Barnes WWAY 3 ABC Wilmington, NC 140 6100 Phone: ...... 803/731-5951 KCBD 11 NBC Lubbock, TX 145 11900 Fax: ...... 803/731-5982 WALB 10 NBC Albany, GA 147 11850 Email: ...... [email protected] WLOX 13 ABC Biloxi-Gulfport, MS 156 17000 KPLC 7 NBC Lake Charles, LA 177 8500 ©2005 Radio Business Report, Inc. Material may not be reproduced without permission. All content may not be KAIT 8 ABC Jonesboro, AR 179 8900 reproduced, photocopied and/or transmitted without written prior Source: BIAfn Media Access Pro consent. Any violations will be dealt with legally. Printed in USA. Radio & Television Business Report is published monthly by Radio Business Report, Inc. Publishers of RBR/TVBR Daily Morning E-Papers, RBR/TVBR Afternoon Media Mix, THE EXLINE COMPANY rbr.com, tvbr.tv and the Information Services Group database. MEDIA BROKERS • CONSULTANTS Annual Memberships RBR/TVBR Magazine ...... $89 RBR Epaper ...... $108 AM’S/FM’S/LPTV’S TVBR Epaper ...... $108 Media Mix ...... $89 Opportunities Available Cover Art Credit: Medium-Large Markets Chick Alcorn 9630 Mistletoe Rd. Tujunga, CA 91042 ANDY McCLURE DEAN LeGRAS 818-951-5908 4340 Redwood Highway • Suite F-230 • San Rafael, CA 94903 [email protected] Telephone • 415-479-3484 Fax • 415-479-1574

30 RBRi&iTVBRZNovemberi2005 Raycom buys Liberty Corp. in Southeast mega-merger While the entire industry was anxiously watching the Emmis sell-off, another mega- deal was being put together under most folks’ radar screen. The surprise announce- ment has privately owned Raycom Media buying publicly traded Liberty Corporation for $987 million. Under the buyout agree- ment, Liberty Corp. shareholders will be paid 47.35 per share and Raycom will as- sume $110 million in debt. Liberty’s largest shareholder, Mario Gabelli and the investment funds he man- ages, quickly made it clear that he thought the price was too low and began pressing for a competing bid or for Raycom to up the ante. But that appears to have come to naught and the deal as announced is mov- ing forward. With eight of its 14 stations in markets 100+ (only one of the Emmis stations sold so far was 100+), Liberty Corporation brought a lower multiple. The company’s SEC filings indicate that it had $91.9 million in cash flow for 2004 (on $219M in revenues, including nearly $15M from its cable ad sales opera- tion), working out to a 10.7 times multiple, which likely would be more like 12 in this non-election year. The acquisition will increase the Raycom group to 52 stations, pretty much all within its regional focus of the South- east US. Raycom, based in Montgomery, AL, is employee-owned, with financial backing from the Retirement Systems of Alabama and Wachovia Bank. It is headed by CEO Paul McTear. RBR/TVBR observation: One possible hold-up to closing the transfer of the 14 Lib- erty stations to Raycom could be the FCC’s current disposition toward temporary waiv- ers of its ownership limits. This deal would create duopolies in Columbia SC (with WACH-TV, Ch. 57, Fox); Toledo, OH (with WNWO-TV, Ch. 24, NBC); Albany, GA (with WFXL-TV, Ch. 31, Fox); and Wilmington NC (with WECT-TV, Ch. 6, NBC). Raycom has requested temporary waivers to sell stations in each market to come into compliance with ownership caps. Since we’re talking markets #70 to #147, it’s unlikely that either the FCC or Congress would act in the foreseeable future to allow duopolies of big four net- work affiliates in those markets.

RBRi&iTVBRZNovemberi2005 31